Competitive Landscape of the Chocolates Industry in India

21 Feb

2011

Introduction

The market for chocolates is valued at INR 27bn

India is one of the most attractive markets for fast-moving consumer goods in the Emerging Market economies. Boasting a population of 1.2bn in 2011 and a rapidly growing middle class, Indian has become a popular destination for multinational FMCGs. The market for chocolates was valued at INR 27bn in 2009 and was forecast to nearly double in five years. The following factors make India a particularly attractive market for chocolates: " " Real GDP per capita is forecast to grow by 8.05% p.a. until 2015 Middle income households (earning between INR 200,000 and INR 1,000,000 p.a.) are forecast to comprise 25% of total household in 2015, up from 6% in 2010 Children under the age of 15 years, comprise 30.8% of the total population Export markets in the Indian sub-continent, Central Asia and South East Asia are in close proximity

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Cadbury, Nestle and Amul are the biggest players

The chocolates industry in India is characterised by oligopolistic competition. While Cadbury, Nestle and Amul are the biggest players, high profit margins are attracting new entrants who are creating niche markets for themselves. In 2010, Elixir was mandated by a leading supplier of chocolates in India, to provide competitive intelligence on current market dynamics. Methodology

As a starting point EBR sourced secondary information on the sector... ... to delve deeper EBR conducted extensive primary research

To determine key market dynamics, EBR conducted detailed research and analysis of the competitive landscape, pricing mechanism and product offerings. As a starting point, EBR collected key data points from credible local and international databases, company financials (in case of listed companies) and financial and business press releases. To delve deeper, Elixir conducted extensive primary research entailing interviews with reliable third-party sources, employees within or associated with the target company, on-the-ground field work including an extensive B2C web-based survey to determine: " " Key competitors, their market share, key strengths and degree of cohesion or fragmentation among competitors Financial performance of key competitors. EBR undertook extensive financial modelling to gauge the financial standing and sources of profitability of each of the key competitors. EBR determined: Sales, profit and cash flows break-up with respect to product-mix Investment strategy for retained earnings Possible variations in investment strategy and the circumstances for such variations Overall strategy of competitors, including pricing strategy, branding, marketing, and product portfolio.

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